Below is a full transcript of this video presentation. It has not been edited or reviewed for accuracy or readability.

Margaret Clancy: So how much are we on time? Should we open it up, or—?

Male: About 15 minutes.

Margaret Clancy: Oh, 15 minutes? Okay. All right. Well, then I think at this point we’ll open it up to the audience, and then Amanda first, and then I’ll get to other people. Thanks.

Amanda: Thank you. Amanda from Oakland, California. I just wanted to build on the example you just gave, or ask a question to build on that example. One of the challenges that has been discussed with the 529 is that there is no better way to go and have a kid to put your dollars in. And so I’m interested in other creative ways that you all thought about sort of creating that experience with the kids and the families, but also the convenience, and how that should play out in your program.

Clint Kugler: Again, our, the State of Indiana is rural. There’s not a bank system that’s consistent in every county, in every community. So to choose a bank, I know that Mississippi has a series of partners, but again, that’s a tremendous amount of work to do when you have a state sponsor piece that reaches, and then the creative workarounds with your financial partners. Again, some communities opt to do it, and some of our communities have not. But the safe guards need to be in place in order to protect those accounts, and the proper accounting of those deposits, but to create an opportunity for the unbanked population.

Margaret Clancy: Linda, do you want to add to that?

Linda English: Yeah. In Alaska, when I was the 529 manager there, and in Nevada, folks can come into my office and give me cash, and I would take it, and do the transfer to the 529. I’m not a bank on every corner, but I do in Nevada have, you know, two offices, and had, you know, two offices in Alaska as well. So we do offer that to folks.

Margaret Clancy: Anybody else? Okay. Thanks. Yes.

Felicia: Felicia [unintelligible 00:02:14] Ferguson Commission. I have a question. For all of the 529 accounts that kindergarten is the trigger for the ones that are not universal, is there an opportunity after kindergarten for families to opt in? Or do you just have that, you know, kindergarten year, and we’re done?

Gloria Brainsby: Okay, sure. At this point, there is no other opportunity to opt into the program. And it’s just for kindergartners. But when you consider the social mobility rate in the school district, which is over 50 percent, it’s certainly something that is on my mind. When Willy Elliot talked about, what did we call it? Group inclusion? What was the phrase he used?

Male: Congruence.

Gloria Brainsby: Thank you. What he said. You know, you think about how that’s really exciting the kindergarten year, but as we go to each subsequent year, and children reticulate into 1st, 2nd, 3rd, 4th grade. And of course, only some of the kids will have this account. And so we might be losing some of that opportunity. So one of the things that we’ve discussed is perhaps, you know, is there another opportunity at 3rd grade, 6th grade, 9th grade and so on, as well as doing incentive deposits at that point for certain behaviors. So these are things we’re considering.

Speaking to the previous question, however, one of the things that we’ve talked about is maybe creating better choice architecture at our program’s outsets. So in addition to opening up the account beyond passing with the owner, the child is the beneficiary sub account. Instead of only doing that, gathering one more piece of information, which is the guardian’s Social Security Number, and giving them the opportunity to open up their account in their name, their ownership right then and there. So in other words, trying to do things using behavioral economics to increase the likelihood that that second account is indeed open so that families have that opportunity to make their own deposits.

Clint Kugler: In our situation, ours happens primarily at school registration. Integrated in. You sign up for your bus, you sign up for your lunch, you sign up for your college saving’s account. We don’t make this exclusive to just the grade level. The cohorts are eligible for matching dollars; 25 dollars if they establish it. If they raise 25 dollars during the champion process, they get an additional $75, and that’s based on if it’s a four grade level cohort, they’re eligible for that match for multiple years. If I have even an 11th grader come through the school registration, we’ll sign them up, streamline three minutes. They don’t receive the financial benefits; the incentives. But it helps the families get done maybe what they’ve wanted to do, but life is crazy. Streamlined, integrated, and so we have those conversations. Who’s having the conversations with those families? Not somebody from Ascensus, or from College Saving Directs. It’s the teachers, it’s the administrators, it’s local people that they see, and trust, and have a connection with.

Margaret Clancy: And Clint, real quickly, the streamline that you talk about. You’re pulling information from the school system to automatically populate some of the information so there’s fewer fields.

Clint Kugler: That’s the direction that we’re wanting to go to line up with a checkbox. It’s a system that we work with Ascensus to collect the essential data through a streamline system.

Megan: Sorry. So a very specific question for Clint, and you might not have it yet. But I’m just curious, I think I heard that Indianapolis is looking to come online SSA. Do you have any insights as to sort of how you’re bridging the ability to connect in a smaller community through Wabash County Program, and then how the same principles are being applied in a much larger community like Indianapolis?

Clint Kugler: Yeah. So they’re having some awesome conversations about what activation looks like, and how they want to build this. At this point, it’s going to be more of the approach that Boston is exploring with targeted communities, targeted schools, and then build the capacity and the momentum. They have tremendous support from Central Indiana Community Foundation, the YMCA group of Indianapolis has signed on to be their convener. A state analysis of YMCAs, now I’m a YMCA guy, have committed to activating 20 pilot communities in the next five years. So we have alliances of organizations that say we want to get behind this work, and it’s helping us to build the momentum. So it’s going to look different. There’s a tremendous amount of learning. We’re going to lean on other folks to learn about the urban implantation lessons that they have had. But that’s as much as I can give you right now.

Margaret Clancy: Yes.

Beth: Hi, my name’s Beth, and I’m from [unintelligible 00:07:13]. My question is, for folks that are interested in developing a universal program, and having to live without Social Security Numbers, and are interested in having families make their own contributions to the accounts, right now that’s not possible to mentioning with omnibus accounts, or the entity owned 529s. And my question is, do you anticipate a future where that might be possible? What would need to change for that to be the case, then? Is it a technology issue, or a regulatory issue, or both, or neither?

Margaret Clancy: Lynn, why don’t you answer that one?

Lynn Ward: It’s a regulatory issue. As a 529 plan, we are required to issue a 1099 after withdrawal is made. So at the end of the calendar year, so by January 31st for the previous year, we have to issue a 1099 to the account owner for any withdrawals made to the account owner or if a rollover was made out of our plan into another state’s 529 plan. The 1099 goes to the beneficiary. If the beneficiary got the check, of course the account owner would have to be the one to request it, not the beneficiary, because the beneficiary doesn’t open the account. Or if the check was made directly to the school, then the beneficiary gets the 1099. And on a 1099, one of the required fields is Social Security Number, so it’s nothing that the plans that we have discretion over, it’s the federal law for tax reporting purposes.

Margaret Clancy: Linda, did you want to add anything?

Linda English: Let me just say, too, that the idea of co-mingling both the private money and the state money, typically the seed money has restrictions on it. And you wouldn’t probably want to put the same restrictions on the family’s money, so those are issues. And again, one of the main reasons why we went to the two account structure, you know?

Margaret Clancy: I think if families wanted to give up their ownership of the funds, that account structure that’s used in kindergarten to college would be possible in a 529. So there isn’t that regulatory issue, it’s just because 529 plans offer other benefits, like a saving’s match that the individual has to own the account, or a state tax deduction and different benefits. And then as, Linda I think talked about, withdrawal of the family’s funds if they want to withdrawal that money. But I don’t think there’s anything in the 529 structure that if somebody wanted to pull the money, but I don’t think any state or community organization that uses a 529 has chosen that co-mingling approach.

Clint Kugler: And as we were looking at this issue, I mentioned it in the innovations that we’re exploring, we’ve not talked about community foundation owned omnibus accounts. Where the community foundation has a 529, it’s the community foundation’s 529. And we manage the omnibus within that, so the organizational number is the social security for the organization; the VIN number, I think it is?

Margaret Clancy: So then individuals can contribute to that. And then they wouldn’t have to use their own.

Linda English: But you introduce a tremendous amount of complexity if you—the simplicity of a roster is you have a million dollars, you have, you know, 50,000 kids, its division. Everybody’s got the same thing. When you have the personal money coming in, and then they have a different amount, you would have to somehow break that out, or you would need a robust reporting/record keeping system that could handle accounts having different value and different units and shares. So you add that completely, you know, that’s really complex.

Margaret Clancy: Lynn, it looks like Lynn wanted to say one more thing.

Lynn Ward: Yeah, just one more thing, too on the Social Security Number, that that is a unique identifying number, so there could, at some point, be a substitution. That number’s, you know, a student I.D. number as a way to track that this is the right Suzy Jones that we’re giving the money to. But you know, the main reason for the requirement of the Social Security Number at this point is the tax reporting.

Margaret Clancy: And so the withdrawal, too, to make sure the withdrawal goes to the right student—

Lynn Ward: Exactly.

Margaret Clancy: ...15 years later, or 18 years later.

Lynn Ward: Exactly. Especially when people are transitory around the country.

Linda English: Right. You know, and as much as we don’t like it, the, you know, Social Security Number is used because it doesn’t change. Student I.D. in my state, if you move from my county Nye County to Clark County, they renumber you. But I said, “But wait, there’s a state I.D.” And they go, “Yeah, but we only use that for testing. We like to renumber everybody.” So there’s not—it’s crazy. So having a unique number, that again, to Margaret’s point about unclaimed property, should these accounts ever get to the point where they are abandoned, and the state is looking for the rightful owner to return the money, if you don’t have that identifier; the Social Security Number unfortunately, you can’t really hook it up; make sure you got the right person who’s trying to claim it after it goes dormant. So it’s complicated.

Margaret Clancy: Thank you. Yes. Louisa?

Louisa Quittman: Hi. Louisa Quittman from U.S. Treasury. I’m curious, and I think this is mainly for Lynn, but maybe Linda and others also can weigh in. To what extent are we working with your states higher education systems to make sure that these young people who have saved are really kind of preparing in other ways for higher education, and also sort of taking advantage of other state funding, state loans, state—other types of tuition opportunities and so forth? And I know it’s still early for a lot of these programs, but maybe it’s not too early to start thinking about that.

Lynn Ward: Right. UESP is a sister agency to our state’s student loan program, and we both report to our state board of regions, so it’s completely within the Utah System of Higher Education. Most of the 529 plans are under the umbrella of their state treasurer’s office. Some, like us, are under high educations, so we’re very plugged in. One of our former commissioners of higher education is a big supporter of 529 plans, and saving, and having people be financially prepared as well as prepared otherwise to have higher education. So he had an idea of legislature pass that is for 9th, 10th, 11th, 12th graders in the state of Utah, if they need certain educational attainment criteria; for example, you know, so many years of English, so many years of math at certain levels and so on, and they have a UESP account, and put in at least 100 dollars in any of those years, they qualify for what’s called the Regent’s Scholarship, which is used at our state’s public institutions. And so UESP is not funding this extra boost to the scholarship. It’s coming out of our general fund appropriations, but it’s a way that there’s been a lot more exposure about saving for college, and being financially prepared, and academically prepared, because that will help with success of completion.

Linda English: Right. And our 529 is in our Treasury Department, but we work very closely with the Nevada System of Higher Education, because they help us administer the Governor Guinn Millennium Scholarship program. So they’re familiar with our programs. We work with them. We go and staff their events when they bring the middle school kids onto campus, and things, and do presentations for parents and things. So we try to have a really close relationship with them.

Margaret Clancy: Well, I think our time is up. I want to give a big round of applause to the [unintelligible 00:15:08].